Win Thin

Win Thin is a senior currency strategist with over fifteen years of investment experience. He has a broad international background with a special interest in developing markets. Prior to joining BBH in June 2007, he founded Mandalay Advisors, an independent research firm that provided sovereign emerging market analysis to institutional investors. He received an MA from Georgetown University in 1985 and a B.A. from Brandeis University 1983. Feel free to contact the Zurich office of BBH

Articles by Win Thin

Stock Markets
EM FX ended mixed in Friday, capping off an up and down week. RUB and TRY initially firmed on their respective rate hikes but gave back some of those gains heading into the weekend. Trade tensions are likely to remain high, as press reports suggest President Trump is pushing ahead with tariffs on $200 bln of Chinese imports even as high-level talks are planned. With US rates pushing higher, we think the backdrop for EM remains negative.

Summary
Philippine central bank signaled another big hike.
Poland central bank appears to be moving its forward guidance out further.
Russia officials are sending confusing signals regarding monetary policy.
Russia officials stand ready to support the ruble debt market if new US sanctions negatively impact it.
South Africa’s African National Congress pledged to undertake land reform responsibly.
Moody’s cut its 2018 growth forecast for South Africa to 0.7-1.0% from 1.5% previously.
Central Bank of Turkey signaled it will hike rates at the September 13 meeting.
Argentina announced a new export tax to help narrow the budget deficit.
Brazil presidential candidate Jair Bolsonaro was seriously wounded at a campaign

Stock Markets
EM FX ended last week on a firm note, but weakness resumed Monday. Higher than expected Turkish inflation hurt the lira, which in turn dragged down BRL, ARS, ZAR, and RUB. We expect EM to remain under pressure this week when the US returns from holiday Tuesday.

Stock Markets Emerging Markets, August 29 – Click to enlarge

Korea
Korea reports August CPI Tuesday, which is expected to rise 1.4% y/y vs. 1.5% in July. If so, inflation would remain well below the 2% target. BOK just left rates steady at 1.5% on Friday. Next policy meeting is October 18, and no change is expected then. It reports July current account data Thursday.
South Africa
South Africa reports Q2 GDP Tuesday, which is expected

Stock Markets
EM FX was whipsawed last week but ended on a firm note. We look past the noise and believe that the true signals for EM remain higher US interest rates and continued trade tensions, both of which are negative. Turkish markets reopen after a week off. Nothing fundamentally has changed there, and so it still poses some spillover risk to wider EM.

Stock Markets Emerging Markets, August 22 – Click to enlarge

Mexico
Mexico reports July trade Monday, which is expected at -$1.7 bln. Banco de Mexico releases its quarterly inflation report Wednesday. Inflation was a higher than expected 4.81% y/y in mid-August, still above the 2-4% target range. Next policy meeting is October 4, and much will depend on

Stock Markets
EM FX stabilized last week as the situation in Turkey calmed somewhat. Reports Friday that the US and China are hoping to resolve the trade dispute also helped EM FX ahead of the weekend. However, TRY remains vulnerable as the US threatens more sanctions due to the pastor. Both S&P and Moody’s downgraded it ahead of the weekend and our own ratings model points to further downgrades ahead. Turkish markets are closed this week for holiday.

Stock Markets Emerging Markets, August 15 – Click to enlarge

Thailand
Thailand reports Q2 GDP Monday, which is expected to grow 4.4% y/y vs. 4.8% in Q1. CPI rose 1.5% y/y in July, which is still in the bottom half of the 1-4% target range. The Bank of Thailand

Stock Markets
EM FX came under greater pressure last week as the situation in Turkey deteriorated. With no weekend developments as of this writing, we expect Turkish assets to remain under pressure this week. Five worst EM currencies YTD are TRY (-41%), ARS (-36%), RUB (-15%), BRL (-14.5%), and ZAR (-12%). All five have serious baggage that warrants continued underperformance.Yet it’s worth noting that the five best are MXN (+4%), COP (+1.5%), MYR (-1%), PEN (-1.5%), and THB (-2%). Yes, we are in a broad-based EM bear market but investors are not selling indiscriminately.

Stock Markets Emerging Markets, August 08 – Click to enlarge

China
China reports July retail sales and IP will be reported Tuesday. IP is

Stock Markets
EM FX has come under pressure again due to ongoing trade tensions and rising US rates but saw some modest relief Friday after the PBOC announcement on FX forwards. This helped EM FX stabilize, but we do not think the negative fundamental backdrop has changed. Best performers last week were MXN, PHP, and PEN while the worst were TRY, ZAR, and KRW.

Stock Markets Emerging Markets, August 01 – Click to enlarge

Czech Republic
The Czech Republic reports June industrial and construction output and retail sales Monday. June trade will be reported Tuesday. It then reports July CPI Thursday, which is expected to rise 2.3% y/y vs. 2.6% in June. If so, it would move inflation back towards the 2% target.

Stock Markets
EM FX enjoyed a respite from the ongoing selling pressures, with most currencies up on the week vs. the dollar. Best performers were CLP, MXN, and ZAR while the worst were TRY, CNY, and COP. BOJ, Fed, and BOE meetings this week may pose some risks to EM FX.

Stock Markets Emerging Markets, July 25 – Click to enlarge

South Africa
South Africa reports June money, loan, and budget data Monday. June trade and Q2 unemployment will be reported Tuesday. SARB just turned more hawkish, saying it would act if inflation “significantly exceeds” 4.5%. CPI rose 4.6% y/y in June and July data is due out August 22. Next policy meetings are September 20 and November 22 and decisions will clearly be

Stock Markets
EM FX saw some violent swings last week, due in large part to some unhelpful official comments Friday. BRL and TRY were the best performers last week, while RUB and CLP were the worst. When all is said and done, however, we think Fed policy remains unaffected and so we remain negative on EM FX. Also, global trade tensions remain high after Trump threatened tariffs on all Chinese imports entering the US.

Stock Markets Emerging Markets, July 18 – Click to enlarge

Korea
Korea reports trade data for the first 20 days of July on Monday. It reports Q2 GDP Thursday, which is expected to grow 2.9% y/y vs. 2.8% in Q1. The economy remains sluggish and faces headwinds from global trade tensions. Next BOK

Stock Markets
EM FX ended Friday mixed, capping off a mostly softer week. TRY, MXN, and RUB were the top performers and the only ones up against USD, while ARS, CLP, and BRL were the worst. Looking ahead, US jobs data on Friday pose some risks to EM, coming on the heels of a higher than expected 2% y/y rise in PCE. China will also remain on the market’s radar screen, with the first snapshots of June economic activity just starting to emerge. We remain negative on EM FX.

Stock Markets Emerging Markets, June 27 – Click to enlarge

Mexico
Mexico reports June PMI Monday. Banco de Mexico releases its minutes Thursday. At that meeting, it hiked rates 25 bp ahead of the election. If markets react badly to the

Summary
PBOC fixed USD/CNY at the highest level since December 14.
Bank Indonesia delivered a larger than expected 50 bp to 5.25%.
Bulgarian Prime Minister Boyko Borissov survived a second no-confidence vote this year.
Turkish President Recep Tayyip Erdogan was re-elected but with sweeping new powers.
Saudi Arabia, Kuwait, and UAE are reportedly in talks to help stabilize Bahrain.
The South African Reserve Bank basically ruled out further easing.
Brazil government cut the inflation target to 3.75% +/- 1.5 percentage point for 2021.
Stock Markets
In the EM equity space as measured by MSCI, Mexico (+3.8), Colombia (+2.9%), and the Russia (+2.3%) have outperformed this week, while China (-3.5%), Chile (-2.9%), and

Stock Markets
EM FX ended Friday mixed, and capped off a mixed week overall as the dollar’s broad-based rally was sidetracked. EM may start the week on an upbeat after PBOC cut reserve requirements over the weekend. Best EM performers last week were ARS, MXN, and TRY while the worst were THB, IDR, and BRL.

Stock Markets Emerging Markets, June 20 – Click to enlarge

Indonesia
Indonesia reports May trade Monday. Exports are expected to rise 6% y/y and imports by 12% y/y. Bank Indonesia meets Thursday and is expected to hike rates 25 bp to 5.0%. Though inflation remains low, the bank has hiked twice already to help support the rupiah.
Singapore
Singapore reports May CPI Monday, which is expected to rise 0.3% y/y

Summary
Nor Shamsiah Mohd Yunus was named the new Governor of Malaysia’s central bank.
Moody’s cut the outlook on Pakistan’s B3 rating to negative from stable.
National Bank of Hungary tiled more hawkish.
Israeli Prime Minister Benjamin Netanyahu’s wife was charged with misusing public funds.
MSCI added Saudi Arabia and Argentina to its Emerging Markets index
Brazil’s government its split on the inflation target for 2021.
Ivan Duque will be the next president of Colombia.
Stock Markets
In the EM equity space as measured by MSCI, Mexico (+2.4), Turkey (+1.7%), and Russia (+1.5%) have outperformed this week, while the Philippines (-6.6%), UAE (-4.3%), and Thailand (-3.9%) have underperformed. To put this in better

Stock Markets
EM FX was mixed on Friday but capped off a largely losing week. MYR, CLP, and CNY were the best performers over the last week, while ARS, TRY, and ZAR were the worst. We expect EM FX to continue weakening, but note that with very few fundamental drivers this week, we may see some consolidation near-term.

Stock Markets Emerging Markets, June 13 – Click to enlarge

Singapore
Singapore reports May trade Monday, with NODX expected to rise 4.6% y/y vs. 11.8% in April. Retail sales came in much weaker than expected for April, with headline rising 0.4% y/y and ex-autos 0.7% y/y. The October MAS policy meeting is still a few months away, but recent softness in the economy supports our view that it will

Summary
US-China trade tensions are rising.
Pakistan devalued the rupee for a third time since December.
Bulgaria will seek to join the eurozone banking union and ERM-2 simultaneously.
The National Bank of Hungary appears to have tilted more hawkish.
Newly elected Egyptian President El-Sisi shuffled his cabinet.
Argentina has a new central bank chief after Federico Sturzenegger resigned.
Chile central bank signaled that the policy rate is likely to rise before year-end.
Stock Markets
In the EM equity space as measured by MSCI, Mexico (+0.9), India (+0.6%), and UAE (+0.3%) have outperformed this week, while Peru (-3.8%), Brazil (-3.6%), and Philippines (-3.0%) have underperformed. To put this in better context, MSCI

Stock Markets
EM FX ended Friday on a mixed note, capping off a roller coaster week for some of the more vulnerable currencies. We expect continued efforts by EM policymakers to inject some stability into the markets. However, we believe the underlying dollar rally remains intact. Central bank meetings in the US, eurozone, and Japan this week are likely to drive home that point.

China
China reports May money and new loan data this week, but no date has been set. It reports May retail sales and IP Thursday. The former is expected to rise 9.6% y/y while the latter is expected to rise 7.0% y/y. Overall, markets remain comfortable with

Summary
The Reserve Bank of India hiked rates for the first time since 2014.
Malaysia’s central bank governor resigned.
Czech central bank tilted more hawkish.
Russia central bank tilted more dovish.
Argentina got a $50 bln standby program from the IMF.
Brazil central bank signaled more aggressive FX intervention ahead.
Mexico trade tensions with US are rising.
Peru has a new Finance Minister.
Stock Markets
In the EM equity space as measured by MSCI, Qatar (+4.6), UAE (+3.5%), and Poland (+2.7%) have outperformed this week, while Brazil (-5.4%), Turkey (-2.6%), and Russia (-2.0%) have underperformed. To put this in better context, MSCI EM rose 0.5% this week while MSCI DM rose 1.2%.
In the EM local currency bond

Stock Markets
EM FX put in a mixed performance Friday, and capped off an overall mixed week. Over that week, the best performers were IDR, TRY, and INR while the worst were BRL, MXN, and ARS. US yields are recovering and likely to put renewed pressure on EM FX.

Indonesia
Indonesia reports May CPI Monday, which is expected to rise 3.3% y/y vs. 3.4% in April. If so, it would remain near the bottom of the 3-5% target range. However, we think the weak rupiah will keep Bank Indonesia in tightening mode. Next policy meeting is June 28, and another 25 bp hike is likely.
Turkey
Turkey reports May CPI Monday, which is expected to rise

Stock Markets
EM FX has started the week mixed. Some relief was seen as US rates stalled out last week, but this Friday’s jobs number could be key for the next leg of this dollar rally. On Wednesday, the Fed releases its Beige book for the upcoming June 13 FOMC meeting, where a 25 bp hike is widely expected. We believe EM FX remains vulnerable to further losses.

Brazil
Brazil reports April central government budget data Tuesday, where a BRL3 bln primary surplus is expected. Consolidated budget data will be reported Wednesday, along with Q1 GDP. Growth is expected to slow to 0.9% y/y from 2.1% in Q4. The decision to freeze diesel

Summary
President Trump canceled the planned summit with North Korea’s Kim Jong Un.
Malaysia’s new Finance Minister Lim was sworn in along with 13 other cabinet ministers.
Philippine central bank cut reserve ratios for commercial banks by one percentage point to 18% effective June 1.
The United Arab Emirates opened up its economy to more foreign investment.
Brazil state-run oil company Petrobras cut the price of diesel fuel by 10% for two weeks.
Brazil President Temer dropped his reelection bid and endorsed former Finance Minister Henrique Meirelles.
The US tightened sanctions on Venezuela following President Maduro’s controversial election victory.
Stock Markets
In the EM equity space as measured by MSCI,

Stock Markets
EM FX ended Friday on a weak note and extended the slide. For the week as a whole, the best EM performers were PHP, TWD, and SGD while the worst were ARS, ZAR, and TRY. With US rates continuing to move higher, we believe selling pressures on EM FX will remain in play this week. Our recently updated EM Vulnerability Table supports our view that divergences within EM will remain.

Stock Markets Emerging Markets, May 16 – Click to enlarge

Korea
Korea reports trade data for the first 20 days of May Monday. Bank of Korea meets Thursday and is expected to keep rates steady at 1.5%. CPI rose 1.6% y/y in April, below the 2% target for the seventh straight month. KRW has remained fairly steady during

Summary
Bank Indonesia started a tightening cycle with a 25 bp hike to 4.5%.
Jailed Malaysia opposition leader Anwar Ibrahim was released by new Prime Minister Mahathir.
Malaysia scrapped the controversial 6% goods and services tax (GST).
Violent protests shook Israel as the relocated US embassy opened in Jerusalem.
Argentina committed to fiscal tightening as part of a comprehensive IMF program.
Brazil central bank delivered a hawkish surprise and kept rates steady at 6.5%.
Mexico has started its annual oil hedging program.
Stock Markets
In the EM equity space as measured by MSCI, Qatar (+2.5), Czech Republic (+0.8%), and Turkey (+0.4%) have outperformed this week, while Brazil (-8.2%), Mexico (-5.8%), and

Stock Markets
EM FX ended Friday on a week note and capped of another generally negative week. Worst performers last week were ARS, BRL, and TRY while the best were ZAR, RUB, and KRW. We remain negative on EM FX and look for losses to continue. US retail sales data Tuesday pose further downside risks to EM FX.

Stock Markets Emerging Markets, May 08 – Click to enlarge

India
India reports April WPI and CPI Monday. The former is expected to rise 2.9% y/y vs. 2.5% in March, while the latter is expected to rise 4.4% y/y vs. 4.3% in March. If so, inflation would remain in the upper half of the 2-6% target range. Next RBI policy meeting is June 6, and no change is expected then.
Turkey
Turkey reports April

Stock Markets
EM FX came under intense selling pressures last week. The worst performers were ARS, TRY, and MXN while the best were PHP, KRW, and TWD. US rates are likely to remain the key driver for EM FX, and so PPI and CPI data will be closely watched this week. We believe EM FX will remain under pressure.

Stock Markets Emerging Markets, May 08 – Click to enlarge

Indonesia
Indonesia reports Q1 GDP Monday, with growth expected to remain steady at 5.2% y/y. Price pressures remain low, but the weak rupiah is likely to push Bank Indonesia into a more hawkish stance this year. Next policy meeting is May 17, and rates are likely to be kept steady at 4.25%.
Czech Republic
Czech Republic reports March

Summary
Bank Indonesia is taking measures to stabilize the local bond market.
The Philippine central bank is tilting more hawkish.
Czech National Bank cut its inflation forecasts.
The Turkish government is loosening fiscal policy to drum up popular support.
S&P downgraded Turkey to BB- with stable outlook.
Argentina officials are taking significant measures to support the peso.
Brazil central bank made a subtle shift in its FX intervention strategy.
Stock Markets
In the EM equity space as measured by MSCI, Hong Kong (flat), South Africa (flat), and China (-0.2%) have outperformed this week, while Mexico (-5.9%), Brazil (-5.2%), and Turkey (-4.7%) have underperformed. To put this in better context, MSCI EM fell -1.7%

Stock Markets
EM FX ended Friday on a firm note, capping off a generally softer week overall. TRY and PHP were the best performers last week, while CLP and ZAR were the worst. US core PCE, ISM manufacturing, FOMC meeting, and jobs data all pose risks to EM this week. We remain a bit defensive on risk assets in general now.

Stock Markets Emerging Markets, April 25 – Click to enlarge

Korea
Korea reports March IP Monday, which is expected at -1.6% y/y vs. -6.4% in February. It then reports April trade Tuesday, with exports expected to rise 3.9% y/y vs. 6.1%in February. April CPI will be reported Wednesday, which is expected to rise 1.5% y/y vs. 1.3% in March. If so, inflation would remain below the 2% target

Stock Markets
EM FX came under renewed pressure last week as US yields rose to new highs for the cycle. RUB and TRY were the top performers last week, while MXN and COP were the worst. There are no Fed speakers this week due to the embargo ahead of the May 2 FOMC meeting. While we see little chance of a hike then, markets are likely to remain nervous.

Stock Markets Emerging Markets, April 18 – Click to enlarge

Singapore
Singapore reported March CPI today. It rose 0.2% rather than 0.5% y/y. March IP will be reported Thursday, which is expected to rise 5.3% y/y vs. 8.9% in February. Economic data have come in on the soft side, and so we expect the MAS to keep policy steady at its next meeting in October.

Summary
The Reserve Bank of India is tilting more hawkish.
Tensions on the Korean peninsula are easing.
The Trump administration reversed course on Russia sanctions.
Turkey is heading for early elections.
Raul Castro stepped down as president of Cuba.
Mexico polls show continued gains for Andres Manuel Lopez Obrador.
Stock Markets
In the EM equity space as measured by MSCI, Qatar (+4.8%), Russia (+3.3%), and Singapore (+2.9%) have outperformed this week, while Mexico (-3.1%), Taiwan (-2.4%), and the Philippines (-2.2%) have underperformed. To put this in better context, MSCI EM fell 0.3% this week while MSCI DM rose 0.8%.
In the EM local currency bond space, Turkey (10-year yield -47 bp), China (-19 bp), and Brazil

Stock Markets
EM FX was mixed Friday, capping a mixed week as a whole. COP, CLP, and MXN were the best performers last week, while RUB, BRL, and TRY were the worst. While concerns about trade wars and Syrian missile strikes have ebbed, risks to EM remain elevated. US retail sales Monday and Fed Beige Book Wednesday are the economic highlights this week.

Indonesia
Indonesia reports March trade Monday. Bank Indonesia meets Thursday and is expected to keep rates steady at 4.25%. CPI rose 3.4% y/y in March, near the bottom of the 3-5% target range. As such, Bank Indonesia should be able to keep rates on hold for most of this